The final prospectus for HBanc Capital Securities Trust has been filed with Canadian securities regulators for an initial public offering of Class A and Class U units of the fund, Connor, Clark & Lunn Capital Markets Inc. said Thursday.
The maximum amount of the offerings is $155 million. The offerings are expected to close on or about October 13. The Toronto Stock Exchange has conditionally approved the listing of the Class A units, Series 1 under the symbol HSC.UN. Class A units, Series 2 and Class U units will not be listed on a stock exchange but may be converted into Class A units, Series 1 on a weekly basis.
The fund was established to provide investors with high levels of stable, tax-advantaged distributions through exposure to Capital Securities issued by global bank HSBC Holdings plc.
The fund aims to provide unitholders with monthly, tax-advantaged distributions consisting primarily of returns of capital, currently representing a yield on the unit issue price of 7% per year, and to provide exposure to the HSBC Capital Securities. The fund will not have a fixed distribution, but intends to make monthly distributions based on the actual and expected distributions on the Capital Securities less the fund’s estimated expenses.
Connor, Clark & Lunn Capital Markets Inc. will act as manager of the fund. The firm also acts as the manager of Canadian Banc Capital Securities Trust and North American Financials Capital Securities Trust, and is part of the Connor, Clark & Lunn Financial Group, which is responsible for the investment of approximately $35 billion in financial assets as at June 30, 2010.
The Capital Securities are denominated in U.S. dollars. The manager intends to hedge substantially all of the value of the Capital Securities back to the Canadian dollar in respect of Class A units. The manager will not hedge its currency exposure in respect of Class U units.
The units are being offered for sale by a syndicate of agents led by BMO Capital Markets and HSBC Securities (Canada) Inc., and includes CIBC, RBC Capital Markets, National Bank Financial Inc., Scotia Capital Inc., GMP Securities L.P., Canaccord Genuity Corp., Dundee Securities Corporation, Macquarie Capital Markets Canada Ltd., Raymond James Ltd., Desjardins Securities Inc., Mackie Research Capital Corporation and Wellington West Capital Markets Inc.
The fund has granted to the agents an over-allotment option, exercisable for a period of 30 days from the closing date, to offer additional Class A units, Series 1 in an amount up to 15% of the aggregate number of Class A units, Series 1 sold on the closing date. If the over-allotment option is exercised in full under the maximum offerings, the gross proceeds to the fund are estimated to be $178.25 million.
IE
HBanc Capital Securities Trust files final prospectus
Fund aims to monthly tax-advantaged distributions
- By: IE Staff
- September 30, 2010 September 30, 2010
- 14:47